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- **Revenue Growth**: Q3 pretax earnings up 66.5%, production volumes 60% YoY, driven by North American market recovery.
- **Strategic Funding**: Completed first single-counterparty securitization, reducing transaction costs and diversifying funding.
- **Credit Discipline**: Weighted average LTV 65.5%, stable coupons at 10.5%, and nonperforming loans down 0.5pt QoQ.
- **Operational Scale**: Headcount up 82 YoY to 347, supporting 32% YoY portfolio growth and stable NIM.

**【CEO Summary Section】**
- **Record Quarter Performance**: Q3 pretax earnings up 66.5%, production volumes at $739 million (60% YoY growth), and new applications exceeding $1.4 billion.
- **Market Expansion**: Gained market share in North America, with disciplined credit metrics (weighted average LTV 65.5%) and stable coupons (10.5% NIM).
- **Strategic Initiatives**: Completed first single-counterparty securitization with a top-tier manager, closing a second transaction in early October to diversify funding.
- **Asset Management Excellence**: Resolved $2.8 million in NPAs above par, maintaining stable REO portfolio.

**【CFO Financial Commentary】**
- **Loan Portfolio Growth**: Total UPB $6.3 billion (32% YoY net increase), weighted average coupon 9.74% (37bp YoY expansion).
- **Credit Quality**: Nonperforming loans at 9.8% (down 0.5pt QoQ), CECL reserves stable at 22bp of HFI portfolio.
- **Liquidity Strength**: $144 million cash and $600 million warehouse capacity, debt-equity ratio maintained at 1x.
- **Cost Efficiency**: Operating expenses down 5% YoY, driven by scale and process improvements.

**【Q&A Key Highlights】**
- **REO Valuation Adjustments**: Q3 net loss of $1.6 million due to market-to-market adjustments, explained as timing noise rather than trend.
- **Headcount Expansion**: Increased staff to 347 (up 82 YoY), reflecting growth in production and servicing capabilities.
- **Funding Strategy**: Leveraging securitization to reduce transaction costs, with pipeline for additional deals.
- **Credit Resilience**: Portfolio LTV at 62.8%, lowest in 5 years, supporting risk-adjusted returns.


Velocity Financial, Inc. (VEL) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

VEL

VEL fundamentals

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